What To Hold: 3 Hold-Rated Dividend Stocks RESI, BKEP, CVRR
TheStreet Ratings' stock model projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Our Buy, Hold or Sell ratings designate how we expect these stocks to perform against a general benchmark of the equities market and interest rates.
While plenty of high-yield opportunities exist, investors must always consider the safety of their dividend and the total return potential of their investment. It is not uncommon for a struggling company to suspend high-yielding dividends which could subsequently result in precipitous share price declines.
TheStreet Ratings' stock rating model views dividends favorably, but not so much that other factors are disregarded. Our model gauges the relationship between risk and reward in several ways, including: the pricing drawdown as compared to potential profit volatility, i.e. how much one is willing to risk in order to earn profits?; the level of acceptable volatility for highly performing stocks; the current valuation as compared to projected earnings growth; and the financial strength of the underlying company as compared to its stock's valuation as compared to its stock's performance.
These and many more derived observations are then combined, ranked, weighted, and scenario-tested to create a more complete analysis. The result is a systematic and disciplined method of selecting stocks. As always, stock ratings should not be treated as gospel — rather, use them as a starting point for your own research.
The following pages contain our analysis of 3 stocks with substantial yields, that ultimately, we have rated "Hold."
Altisource Residential Corporation
Dividend Yield: 14.90%
Altisource Residential Corporation
(NYSE:
) shares currently have a dividend yield of 14.90%.
Altisource Residential Corporation, through its subsidiary, Altisource Residential, L.P., focuses on acquiring, owning, and managing single-family rental properties in the United States. The company has a P/E ratio of 8.14.
The average volume for Altisource Residential Corporation has been 469,000 shares per day over the past 30 days. Altisource Residential Corporation has a market cap of $842.8 million and is part of the real estate industry. Shares are down 24.7% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Altisource Residential Corporation
as a
. Among the primary strengths of the company is its attractive valuation levels, considering its current price compared to earnings, book value and other measures. At the same time, however, we also find weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
Highlights from the ratings report include:
- The revenue fell significantly faster than the industry average of 6.2%. Since the same quarter one year prior, revenues fell by 34.8%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- ALTISOURCE RESIDENTIAL CORP has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, ALTISOURCE RESIDENTIAL CORP increased its bottom line by earning $3.33 versus $1.16 in the prior year. For the next year, the market is expecting a contraction of 70.3% in earnings ($0.99 versus $3.33).
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 80.7% when compared to the same quarter one year ago, falling from $67.78 million to $13.09 million.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, ALTISOURCE RESIDENTIAL CORP's return on equity is below that of both the industry average and the S&P 500.
- You can view the full Altisource Residential Corporation Ratings Report.
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Dividend Yield: 9.50%
(NASDAQ:
) shares currently have a dividend yield of 9.50%.
Blueknight Energy Partners, L.P. provides integrated terminalling, storage, processing, gathering, and transportation services for companies engaged in the production, distribution, and marketing of crude oil and asphalt products in the United States. The company has a P/E ratio of 20.27.
The average volume for Blueknight Energy Partners has been 54,400 shares per day over the past 30 days. Blueknight Energy Partners has a market cap of $200.3 million and is part of the energy industry. Shares are down 8.7% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
Blueknight Energy Partners
as a
. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, generally higher debt management risk and disappointing return on equity.
Highlights from the ratings report include:
- The revenue growth greatly exceeded the industry average of 33.1%. Since the same quarter one year prior, revenues slightly increased by 1.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The debt-to-equity ratio is very high at 2.22 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, BKEP maintains a poor quick ratio of 0.73, which illustrates the inability to avoid short-term cash problems.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Oil, Gas & Consumable Fuels industry and the overall market, BLUEKNIGHT ENERGY PRTNRS LP's return on equity is significantly below that of the industry average and is below that of the S&P 500.
- You can view the full Blueknight Energy Partners Ratings Report.
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Dividend Yield: 17.90%
(NYSE:
) shares currently have a dividend yield of 17.90%.
CVR Refining, LP operates as an independent petroleum refiner and marketer of transportation fuels in the United States. It owns and operates a complex full coking medium-sour crude oil refinery in Coffeyville, Kansas. The company has a P/E ratio of 10.94.
The average volume for CVR Refining has been 375,900 shares per day over the past 30 days. CVR Refining has a market cap of $3.3 billion and is part of the energy industry. Shares are up 26.2% year-to-date as of the close of trading on Thursday.
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TheStreet Ratings rates
CVR Refining
as a
. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
Highlights from the ratings report include:
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Oil, Gas & Consumable Fuels industry. The net income increased by 537.1% when compared to the same quarter one year prior, rising from $21.80 million to $138.90 million.
- The current debt-to-equity ratio, 0.37, is low and is below the industry average, implying that there has been successful management of debt levels.
- CVR REFINING LP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, CVR REFINING LP reported lower earnings of $2.44 versus $4.00 in the prior year. This year, the market expects an improvement in earnings ($2.92 versus $2.44).
- The gross profit margin for CVR REFINING LP is currently extremely low, coming in at 13.61%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, CVRR's net profit margin of 10.20% compares favorably to the industry average.
- CVRR has underperformed the S&P 500 Index, declining 11.80% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full CVR Refining Ratings Report.
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Other helpful dividend tools from TheStreet:
- Our dividend calendar.